What started as an intraday flurry looks like it its taking on more ominous overtones for the shorts. The rush to sell EUR/USD on the combination of ongoing swine flu fears and the WSJ article suggesting that Citi and BofA failed the stress test and will need to raise capital sputtered quite early in the session and stop-loss buy orders were triggered above the 1.3050/55 level at mid-morning. We’ve really never looked back. The longer the rally last, the more more nervous shorts are inclined to cover.
Now prices are breaking through the zone where the slide began Monday morning in Asia after the swine flu outbreak burst into the headlines.
1.3170/80 is resistance just above the market. There we get the 61.8% retracement from Friday’s 1.3301 high to this morning’s 1.2965 low. 1.3180 is chart resistance.
